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Under-fire Primark starts to put its house in order

May 2009

The cut-price clothing retailer Primark has responded to continuing bad publicity about conditions in its supply chain by creating the post of ethical trading director.

At the same time the UK-based chain has established a new job of ethical trade manager in Bangladesh, and is likely to create similar positions in other locations, including China and India. In a further concession to critics, Primark is also to buy a software package to manage its suppliers more effectively.

Primark, which is owned by Associated British Foods, has attracted worldwide media interest for a year over successive revelations of poor practices among suppliers, including child labour in India (EP10, issue 3, p6), and illegal immigrants paid below the legal minimum at UK supplier factories (EP10, issue 9, p7).

The company has adopted a sometimes belligerent stance over the allegations, claiming it has robust supplier auditing in place and that the shortcomings exposed by newspapers and the BBC were aberrations. However, it has never had a permanent full-time senior executive dedicated to supply chain issues, and has now appointed Katherine Kirk, Gap’s former head of accessories, as its first ethical trading director.

Primark said Kirk, who will be based at head office in Reading, UK, would bring ‘considerable expertise’ to the post, although it is unclear how much of her time at Gap was spent on ethical trading.

Sam Maher, a campaigner at Labour Behind the Label, a global alliance of trade unions and non-governmental organizations, said: ‘It’s a step forward to have appointed someone in the company with overall responsibility for [ethical trading]. It’s definitely a sign they are taking it more seriously. But until we see… what she does, it’s too early to tell whether this represents a significant move forward or not.’

In a related move, Primark has created an ethical trade manager position in Bangladesh to provide ‘tailored ethical training’ for suppliers in the country. It will also recruit a female ethical trade executive in Bangladesh ‘with a specific remit to focus on women’s issues in factories’.

It also announced last month that it has signed an agreement with BSI Management Systems to buy its Entropy software, which will ‘simplify the management of supply chain compliance with ethical standards’.

Primark acknowledged that workers’ conditions in some factories ‘do not always meet the high standards that we… expect’, and said it would ‘work tirelessly with our suppliers and other stakeholders to raise standards’.

The company is still being investigated by the Ethical Trading Initiative (ETI), which it joined in 2006, over whether there has been a ‘systematic failure on Primark’s part’ to implement the ETI base code. If breaches are found, sanctions could follow. The ETI welcomed the new appointments as ‘positive steps’, but said it would not comment further during the investigation.

Primark has 800 suppliers and more than 170 stores in the UK and Ireland. Despite recent reputational problems, it says sales have continued to grow. Last month it reported turnover of £1.1billion (£747m) in the year to March 2009, up 18 per cent on the previous year.




Primark | UK & NI Ireland | Supply Chain Management

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